The Federal Debt Collection Practices Act (FDCPA): the Consumer Law Built to Protect

September 8, 2014 Leave a comment

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Simply owing money does not necessarily mean that a debt collector can legally collect it from you. That you actually borrowed the money is not as important as HOW the debt collector is trying to collect it. When a debt collector harasses you, or threatens you, there are federal consumer laws that will protect you. One of these laws is the Federal Debt Collection Practices Act (FDCPA). When a debt collector violates this federal law, there are penalties that are imposed upon them. The FDCPA was designed to protect you, the consumer, from debt collector abuses. You do not have to accept harassing and threatening debt collectors because the FDCPA provides remedies and recourses against them when they do.

The FDCPA and When It Applies To You

The FDCPA is a federal law designed to protect consumers from debt collectors. The law details the actions that can be taken by a debt collector to legally collect a debt and, at the same time, explains the specific actions that are specifically prohibited.

The FDCPA applies under the following circumstances:

  • When You Are a Consumer (not commercial). Simply put, a consumer is an individual. The FDCPA will not protect corporations or businesses.
  • When the Debt is a Consumer Debt (for example, personal loans, debts incurred for your home and/or your family – any debt that is NOT business or commercial related). Examples of consumer debt are automobile loans, home mortgages, personal credit cards and medical bills. Basically, any debt that is not a debt or a loan belonging to a business is a consumer debt.
  • When dealing with a “Debt Collector”. The FDCPA defines a Debt Collector as “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.“ This includes anyone that regularly collects debts for an unrelated institution, such as an institution that hires another to collect a defaulted debt from a customer. In its simplest form, a debt collector collects a debt on behalf of another. Therefore, an original creditor (the person or entity that actually made the loan) is NOT a debt collector and therefore the FDCPA does not apply to them. It does, however, apply to anyone else who is trying to collect that same debt.

When Has the FDCPA Been Violated?

The FDCPA has several parts to it, but in general, if a debt collector takes any action against you that is prohibited by the FDCPA, such as an act that is unjust or disrespectful, they have violated the Act. If they lie to you or threaten you, they have violated the FDCPA. There are other actions that the debt collector can take that would be a violation. Unfortunately, there are too many examples to list them all, but here are a few.

Examples of FDCPA violations:

  • When the debt collector calls but speaks to someone other than the debtor and lets them know that you have a debt that is outstanding. A debt collector cannot let anyone other than the debtor know that there is an outstanding debt exists. This includes family members, roommates, neighbors, workmates and employers. For this reason, they may not leave a recorded message that mentions the debt. They can call and speak to another person (one time), but only to ask for information about your whereabouts and how they can find you.
  • When a debt collector calls you before 8:00am in the morning or after 9:00pm in the evening. Also, they cannot constantly call during this time period in a manner that is harassing.
  • When a debt collector threatens you with legal action of any sort. Many consumers are not aware that debt collectors may not threaten you with legal action. For example, a debt collector cannot tell you that they will take you to court, that they will take your personal belongings away, that they will garnish your wages, or that you will go to jail, if you do not pay the debt collector the debt that is presumably owed. Furthermore, they can not pretend to be attorneys, when they are not.
  • When a debt collector adds amounts to the debt that is not owed. A debt collector is prohibited from asking for an amount that is not owed. In other words, any penalty or interest that has been added to the debt must be part of the original loan agreement. If the original loan agreement that you signed authorizes an interest charge, late fees or other costs such as collection charges, then the debt collector may add it to the amount due. However, many debt collectors add their debt collection fees, when, in fact, the loan agreement does not authorize it.
  • When a debt collector calls your place of employment after letting them know not to. A debt collector may not call your place of employment if you have let them know that you do not want them to call there or that your employer does not allow these types of calls to be made.
  • When a debt collector calls or writes after letting them know not to. Further, they may not call or write you if you have let them know that you do not want to be called or written to. Although you may let them know this by telephone, it is much more effective to make this known in writing in such a way that you obtain proof that such request was made (such a s certified or return receipt) If they continue to call or write you after having made the request that it stop, the debt collector has violated the FDCPA.
  • When a debt collector continues collection efforts after the debtor has requested that the debt be “verified”. If you request verification of the debt, they must stop all collection efforts until they have verified the debt. The verification must be some valid documentation from the Original Creditor, and not just a printout of your name, address and amount of the debt. It is common, however, for debt collectors to use these types of inadequate and insufficient verifications of debt. While these documents may have come form the Original Creditor, they do not comply with or qualify as a ‘verification of debt” that is required under the FDCPA.

As previously mentioned, there are too many examples of violations to cover them all here. For this very reason, it is important that you speak with an experienced Consumer Law attorney to explain and examine all the circumstances in detail in order to determine if there has been an actual violation committed.

The FDCPA Offers 4 Benefits and Protections To Consumers

  1. If you want to file a claim against the debt collector for a violation under the FDCPA or want to defend yourself against a lawsuit filed against you by the debt collector, you are entitled to the reimbursement of all attorney’s fees and costs incurred.
  2. If you suffer “actual damages”, the FDCPA requires that the debt collector reimburse you for these damages. An example of “actual damages” is when a debtor loses his or her job because the debt collector called the place of employment after being asked not to (or after making it known that the employer did not permit these types of calls).
  3. The FDCPA imposes penalties of $1,000 for each violation. This is in addition to any actual damages that you may have incurred. In other words, the fact that a violation has occurred will mean that the debt collector must pay $1,000, period.  If you suffer damages because of this violation., that is payable separate and apart from the $1,000 penalty. And actual damages are not required in order for the $1,000 penalty to be imposed.
  4. If you are successful in your claim against the debt collector and you have agreed to pay your attorney his fees, then – according to the FDCPA – the debt collector must pay them. If we go to trial, the court can impose those attorneys’ fees and costs upon the debt collector. Realize that court costs are not paid for at the end of the case, but rather they are paid at the beginning and throughout the case. Someone has to pay them. Most attorneys will pay these costs for you and get reimbursed for them at the end. Make certain that that you do not have to reimburse your attorney for fees or costs if you are not successful in your claim against the debt collector. You should only be responsible for fees and costs if you are successful in your claim. And because the debt collector is made to pay these fees and costs, you should not have to out-of-pocket them.

If you feel that you have been harassed or abused in any way by a debt collector, you are now able to determine whether or not you have a claim against them based on the protections afforded to you under the Federal Debt Collections Practices Act. Don’t take it lightly. Seek the advice of an experienced Consumer Law attorney and protect yourself using the very tools given to you to stop the Debt Collector from taking advantage of you.


Kevin L. Deeb, Esquire

Kevin L. Deeb, Esquire

Kevin L. Deeb writes for Florida Law Talk, a family of websites that covers Florida’s current legal issues. He is an attorney with Florida Consumer Law Group, P.A. handling Consumer Law and Real Estate Law matters for clients in Florida. You may reach him at www.defendusnow.com or on Twitter at @FlaConsumer


DEBT COLLECTOR WARNING: We Can Call You, Fax You, Email You and Even Pay You a Visit (Whether You Like It or Not)!

August 19, 2013 Leave a comment

What CAN debt collectors do when trying to collect a debt from you?

Well, they can telephone you. And leave a message if you don’t answer.

They can fax you (if you still have a fax).

They can even send you a telegram. Who uses telegrams anymore? I’m not sure, but debt collectors can use them!

And, yes, they can also email you.

Did you know that a debt collector can come knocking on your door? There’s nothing illegal about them paying you a visit!

What about work? They can call you there if they want, too!

What about your family, friends and neighbors? Yep. They can call or visit them as well!

Scary huh?

photo1You’re probably thinking that this can’t be. Well, it can. And it is. The law allows them to.

But, if they CAN do all of these things, what is it that they CANNOT do?

Well, they cannot telephone you, fax you, telegram you, email you, visit you, or communicate with you in any way when it is NOT CONVENIENT. You’re probably thinking, when is it EVER convenient?

Well, a debt collector can NOT call, fax, telegram, visit, or communicate with you before 8:00 am or after 9:00 pm. Unless, of course, you’ve agreed to otherwise (I’m not sure why you ever would).

Debt collectors are also not allowed to call you at work if they are aware that your employer does not approve or if you let them know not to contact you there.

They also can’t communicate with your family, friends or neighbors (in most cases) more than once, or ask for anything other than your telephone number or where you are employed.

Under no circumstances are they to tell ANYONE that you owe them money. This includes sending you a post card letting everyone that sees it know that you owe money.

And they can not lie about who they really are or why they are calling. Or lie about who they work for or what position they hold.

What’s my favorite (and most powerful)? Once you tell them that you have an attorney, they can only communicate with your attorney.

Certainly, they can never harass you. They cannot oppress or abuse you. This means that they can not repeatedly telephone you. Or use profanity. Never can they threaten you. And, although they’ve resorted to it in the past, publish your name anywhere.

If they ever tell you that you have broken a law or may go to jail, they’ve just broken the law themselves. There is no “debtor jail”!!

They can’t threaten you with a lawsuit, unless they really intend to (this one is sort of difficult to prove – but they still can’t do it).

And even is they intend to do it, they can’t THREATEN to garnish your wages, take your property.

Have you been a witness to a debt collector trying to do any of the things they are NOT allowed to do? I’m sure that there are a lot of crazy stories out there. I’d like to hear them. Let us know in the comments below.

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How to Stop Debt Collectors from Calling When Life Gets Crazy

June 9, 2011 Leave a comment

Many are experiencing difficult economic times, and some of you have fallen behind on your credit card bills.  When the calls start coming in, you answer them and cooperate with the debt collector feeling as though you’ll be able to catch up with the payments soon enough.  You also don’t want your credit score to suffer.  You’re thinking that if you cooperate with the “nice” debt collector, he won’t rush to report you to the credit bureaus and ruin your credit score.

You may have been able to make the next month’s payment or even catch up, but then you fall behind again and possibly miss payments on other credit cards.  And eventually those collectors start calling too.

Whatever and however you ended up here, you never meant to fall behind.  And you swear that you want to pay them back, but can’t.  Unfortunately, the calls do not stop.  What at first were friendly reminders and request for payments, turn into persistent and menacing calls for immediate payment.

Once the calls become undignified and insulting, the debtors collectors may have crossed the line and violated the FDCPA.  We’ve covered this law extensively in our other tutorials and recommend that you listen to them if you believe they may be misleading you, or if they begin to use profanity or other tactics which are harassing in nature.  If they do these things, you may have a claim.  You can also call us at 305 771-DEBT or visit us at http://www.defendusnow.com.

Now let’s suppose that the calls are respectful and, while firm, do not insult, threaten you or violate the FDCPA in any way.  But they are consistent. You’re tired of asking for more time, more understanding.  They give you time, but ask for some sort of payment.  You eventually stop answering their calls.

Now the ringing of the phone itself becomes the constant reminder that you’re behind on your payment.  When the phone rings, you’re thinking “I hope that’s not a 1-800 number”.  When you check the caller ID, if it is a debt collector, you may let it ring and may even delete the messages without even listening to them.

Well, it doesn’t have to be this way.  Simply answer the call and get the person’s name, their business name and business address and mail them a letter asking that the phone calls stop and that all communication be in writing.

Now, there are a lot of things you could have done better.  For example, you could have asked that they validate the debt.  This would have ceased all communication until they validate the debt.  Sometimes they may never be able to.  These calls will stop until they do.

Either way, send the letter, whether it be a letter asking that they validate the debt (which I recommend you do first) or a letter asking them to stop calling, but send the letter certified so that you can later prove that the letter was sent and received.

If the calls continue, they have violated the FDCPA and you have a claim against them.  You may never be able to pay them, but if you ever negotiate with them, be sure to know that a lawsuit for an FDCPA violation will certainly give you the leverage you need to get the terms that work for you.

If you’d like to get a FREE consultation with us to review your situation and tell you whether or not you have a claim, call us at 305 771-DEBT or visit us at http://www.defendusnow.com.  It is totally free.  It’s our way of giving back.  And if you do have a claim, you won’t have to pay us.  We’ll make sure that the debt collector pays our fees and costs – and if we don’t, then you still pay nothing.  But you have to call us now.  Call 305-771-DEBT or visit our website now at http://www.defendusnow.com.

Writing Off Meals and Entertainment Costs

April 7, 2011 Leave a comment

Big Bite Pizza

 

I just ran into an Entrepreneur Magazine article with tips about writing off meals and entertainment costs for your business.  There was a time that meals and entertainment was 100% deductible as a business expense.  The IRS, however, has historically been very leery of some of these dinners and events and keeps chipping away at the expenses that qualify.  For example, you may not be able to write off the dinner your wife or husband enjoyed while you were legitimately having business dealings with a partner or prospect.  As always, be sure to consult with your accountant to determine what is and is not a deductible meal and entertainment expense.

Whenever you have a business lunch or dinner, though, be sure to write down (it is best to do this on the actual receipt) who was there with you, what sort of business was conducted and when (before, during or after the mean).  By keeping this information on the receipt, you also maintain the date, time and place of the lunch or dinner.

Has anyone ever had the IRS question a meal or entertainment expense?  We’d love to hear about what issue the IRS had and how you resolved it.

Categories: Uncategorized

I Purchased a Property at a Condominium Lien Foreclosure Auction. Now What?

December 19, 2010 Leave a comment

Q:  I purchased a Florida property at a foreclosure auction where the condominium association (not the lender) had foreclosed on its lien for monthly maintenance.  I am aware that that I purchased the property subject to the first mortgage, but am I responsible for paying the mortgage?  What about the condominium maintenance and property taxes?  Finally, am I able to rent the unit out to a tenant?


Home Foreclosure Relief Quint Cobb

A: According to the scenario you describe, the mortgage lien is superior to your ownership interest and therefore you are responsible for paying off that lien if you want to keep the property.  Your responsibility, however, is limited to that ownership interest.  In other words, your failure to satisfy the mortgage by not making payments or paying it off entirely will not affect your credit (obviously – you did not sign the note) and the mortgage lender will not be able to pursue any deficiencies against you – but you will eventually lose your ownership interest in the property.

Property taxes, or ad valorem taxes, are very similar to mortgage liens in that your interest is inferior to any tax lien as well.  Your failure to pay property taxes will not render you liable for the tax bill in the future either except to the extent that you may lose your ownership interest.  Tax Certificates are sold and the purchaser can foreclosure on the property through a tax deed sale (similar to a mortgage foreclosure, but a lot easier and faster).

As the new property owner, you are liable for the condominium maintenance.  By failing to pay your maintenance, the condo association has the right to collect maintenance from you.  Although they rarely pursue personal money judgments, they can foreclosure on the property (isn’t this the way you ended up with the property in the first place?).  Also be aware that recent Florida legislation (effective as of July 1, 2010), condominium associations have the right to collect rent from tenants occupying units that are behind on monthly maintenance payments.  This is done through a simple and inexpensive process provided by this new law.  Arguably, they can even find a tenant and rent out your unit if it is empty.

Your right to collect (and keep) rental income, however, will greatly depend on the rights of the lender per the terms of the loan agreement.  Some mortgage agreements assign rental income to the lenders or allow them to place the property in receivership.  In order for the lender to exercise these rights, though, they must do so through the courts.  And they often do not.  Also bear in mind that, just as described above, the condominium association can always step in to collect the rent if the maintenance is not being paid.

As always, every situation is different.  It is highly recommended that anyone in a similar situation consult with an experienced real estate attorney to learn more about your legal rights and duties.

10 Steps That Help Real Estate Closings Happen: an Agent’s Primer

November 7, 2010 Leave a comment

 

It's not yet time to relax.

Real Estate Agents must always remain in control of their real estate closings, beginning with the listing agreement and right on through to the closing.  Unfortunately, some Agents still believe that upon the signing of the Purchase and Sale Agreement, the only thing they need to do is sit back and wait for the commission check to arrive.  They couldn’t be more wrong.

Real Estate Agents who have been in the business for a while know that their work begins when the purchase and sale contract is signed.  If the following ten steps are taken, an Agent will find that the work that leads up to closing is much smoother and the chances of having issues preventing a successful sale are diminished considerably.

1.  Establishing the Effective Date.
If there is a fully executed contract and everyone has initialed every page and every handwritten change, an “effective date” of the contract can be determined.  When things are required to be done by the Buyer or Seller under the contract is first determined by the effective date.  Make sure both sides agree on the effective date and get out your date planner. It would be good practice to write a note to your clients outlining the dates.  It will help you remember all the important dates.  Be aware that every contract contains the phrase “Time is of the essence”, which means that ‘Almost’ only counts in horseshoes, hand grenades and nuclear war.  If you miss the date you’ve breached the contract.  Stick to the dates!

2.  The Mortgage Application.
The first deadline is usually the mortgage application.  Make sure the Buyer does it within the timeframe specified, usually five (5) days.  Ensure that the Buyer has documentation verifying the date of the application.

3.  Additional Deposits.
Sometimes, contracts call for additional deposits to be made.  I hate to play lawyer (that’s not true) but failure to meet this date, or any other date, is a breach of contract!  Make sure you send or receive confirmation in writing.  Escrow letters should be made part of your file – ask for them.

4.  Title Documentation.
Get the title information (prior title policy) to the closing agent (me, I hope) or confirm that the Seller has none to give.  This should have been done upon listing the property.

5.  Existing Mortgage Payoff Information.
Get the mortgage payoff information (company, loan number and telephone number) to the closing agent so that the payoff can be requested early on.  It also doesn’t hurt to get a written authorization from the Seller (lenders sometimes require one before providing this information).

6. Condominium or Homeowner Associations.
If it is a condominium or homeowner association, obtain the necessary payoff information.  The association documents hopefully have been delivered to the Buyer, triggering the rescission period time clock.  If it is a condo, start the approval process immediately.

7.  Home Inspections, Municipal Code Violations and Buyer’s Right to Cancel.
Make sure inspections are done and the written reports delivered to the Buyer.  If the Buyer disapproves of the report, make sure a report is delivered to the Seller if the contract calls for it, and send notice of intent to cancel within the contract deadline.  Recommend to the Buyer that a municipal lien search (also referred to as “lien letters”) be obtained through the closing agent early on.  Some contracts require that municipal issues, such as code enforcement violations or citations and open permits, be raised and objected to during the inspection period, otherwise they are waived.

8.  Homeowner’s Insurance.
Make sure the Buyer has selected an insurance agent to obtain Hazard Insurance.  Insurance agents must take pictures of the property, which takes some time.  Even if it is a condo (where a homeowner’s policy is not necessary), suggest that the buyer obtain contents/liability insurance anyway.

9.  Boundary Survey.
Although the title agent orders the survey, don’t assume that it will automatically happen.  When the  Buyer is purchasing the property without financing (i.e., an all-cash deal), title agents often assume that the buyer does not want to obtain a survey or simply neglect to obtain one.  This is can turn out to be a terrible mistake for the Buyer.  There’s a reason why lenders demand that a survey be obtained: an encroachment can affect the use of the property, the value of the property and can affect the owner’s ability to later obtain financing.  It can also lead to litigation.  Worse yet, it can lead to a very upset client.  Make certain that the Buyer is aware of the importance of obtaining a survey.  If a survey will be performed, make the Sellers aware that a surveyor will come by to inspect the property boundary lines so that there are no confusion or delays.  Sometimes it may take some arranging to get the surveyor on the property, so make sure that the title agent doesn’t delay in ordering one.

10.  Following Up With Lender.
Follow up with the Lender to ensure that the Buyer has done everything required.  You want to make sure that the file gets submitted to underwriting!  If has not been submitted, something is incomplete and the Buyer may need some help.

Real Estate Agents should get to know an experienced Real Estate Attorney that is hands-on and should begin by asking other agents of known law firms that handle real estate closings.  By doing so, they may find that the deals close a bit easier and with less involvement on their part.  Getting an attorney title agent involved in the deal from the beginning, as opposed to just a title agent, will also allow title defects and other legal matters to be resolved quickly without resorting to a last minute search for an attorney to rescue the deal on an emergency basis!  After all, real estate attorneys do not charge any more for their closing services than title agents do.  And yet you get all the added benefits should the need arise.

Once the deal is closed, then you can start relaxing on your hammock.

New Free Pre-Filing Consumer Credit Counseling Service Available Online

October 5, 2010 Leave a comment

A free online service is now available that provides the credit counseling course (and certificate of completion) that is required to be taken by individual debtors prior to filing a voluntary petition.  This course, offered by ConsumerBankruptcyCounseling.info as a public service, has received authorization from the Executive Office for the United States Trustee, United States Department of Justice, to service all districts except for the District of Alabama and the District  of North Carolina.  Click here to link to the website.

To view a list of all approved credit counseling providers in Florida’s Southern District, visit the United States Trustee’s website here.

Prior to choosing any provider, verify that it is still on the approved list and that it can provide the service that permits a debtor to timely compy with the pre-filing credit counseling requirements.

 

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